For a better browsing experience, please upgrade your browser.

FiveThirtyEight

Life

An urban legend in the airline industry claims that the former CEO of American Airlines, Bob Crandall, once saved his company $100,000 a year by calling for the removal of a single olive from every in-flight salad.1 As the story goes, some of these savings came from lower fuel burn thanks to fewer olives, and thus a lighter load on each flight in the American network. This story is particularly relevant today, as fuel prices are near historic highs and airline executives are searching for every possible way to cut costs. Take Southwest Airlines. Have you ever noticed that the airline doesn’t offer typical in-flight entertainment systems? Outside the costs of buying, installing and maintaining those small TV screens in airplane seats, entertainment systems also weigh about 7 pounds each and cause airplanes to burn more fuel. As Rob Fyfe, the former CEO of Air New Zealand said in 2013, “There is an enormous economic incentive to reduce the weight of the systems.” All of this got us wondering: Just how much fuel could an airline save by shaving excess weight from a flight? We decided to use an aircraft performance model developed at the Massachusetts Institute of Technology to find out.2 Because new airliner sticker prices range from tens to hundreds of millions of dollars,3 operators try to control fuel costs by flying their existing airplanes as efficiently as possible. And weight is an important factor. All else being equal, a lighter airplane will always be more fuel-efficient than a heavier one. This is easy to understand for large weights; if you load up the cargo hold with bricks, the engines will need to work harder. But the concept is equally valid for smaller weights. Bringing a laptop on your next flight may help you pass the time, but it will also make the airplane slightly heavier and the engines work ever so slightly harder. Our analysis takes into account the distance of a flight, the weight carried onboard the aircraft, and the aircraft type itself. It then simulates every phase of the flight, from departure gate to arrival gate, in order to determine the fuel consumed at each moment along the flight path. To get an idea of how adding small amounts of weight can affect fuel burn on a typical flight, we analyzed a flight from Boston to Denver operated by a Boeing 737-700. Southwest Airlines operates this service three times per day. According to our model, the total cost of fuel for operating this flight with 122 passengers (85 percent of the maximum seating-capacity)4 is about$7,900.5 Each marginal pound6 onboard the aircraft for this flight will result in a marginal fuel cost of a little less than 5 cents.7 So if every passenger remembered to go to the bathroom before boarding, shedding an average of 0.2 liters of urine, the airline would save $2.66 in fuel on this flight alone. Such tactics are not off limits. Ryanair famously contemplated charging customers to use the bathroom (in an effort to reduce the number of on-board bathrooms and pack on more seats). Company spokesman Stephen McNamara said in 2010, “By charging for the toilets we are hoping to change passenger behavior so that they use the bathroom before or after the flight.” The cost savings here are a tiny fraction of the total cost of fuel for the flight because airplanes themselves are heavy machines.8 Even if the flight operated with no passengers or bags, the aircraft would still consume$6,600 worth of fuel to get from Boston to Denver. This reveals an interesting fact: If an airline wanted to save money by reducing weight on this flight, the largest possible savings would be $1,300. And that would require kicking everyone and everything off the airplane. In short, once an airline has decided to service a route, it can only control a small part of the total fuel consumption through weight reduction.9 But that doesn’t mean airlines should write off weight reductions as a way to save money and reduce fuel consumption. When we are only talking about one flight, the savings don’t seem very compelling. But to determine the relevance of weight savings, we need to understand the enormous scale and razor-thin profit margins of airline transportation networks. When you are sitting in a specific airplane, it’s easy to forget that there’s a hornet’s nest worth of other flights airborne at the same moment. On average, there’s a Southwest jet taking off every 24 seconds, day after day, without pause. To get a sense of scale, we created a video showing a typical day in the Southwest network. It’s this immense scale that can enable big savings from small weight changes. To find just how large the savings can be, we extended our simulation to each of the approximately 1.6 million flights operated by Southwest Airlines in 2013.10 The exact amount of money saved on each flight depends on the aircraft type and distance flown. In our analysis, we calculate fuel savings for each flight independently to match the actual flight schedule.11 Here are the potential cost savings at Southwest Airlines from making small weight changes on every flight: It costs Southwest about$1.2 million per year in added fuel when every passenger carries a cellphone, with larger costs of $7 million if every passenger brings a tablet computer, and$21.6 million if everyone totes a laptop. Using Southwest’s network as a proxy for similar-sized airlines carrying embedded in-flight entertainment systems, we found that fuel costs to carry these systems are approximately $39.7 million per year. When compared with installing embedded systems in the seats, simply handing everyone an iPad when they stepped onboard could save about$32.7 million per year in fuel costs.

In-flight entertainment isn’t the only area where airlines believe they can leverage technology for weight savings that translate to their bottom line. American Airlines has been leading the effort to replace pilot’s flight bags (typically full of dozens of pounds of paper documents) with “electronic flight bags”: essentially an electronic library of maps, charts, manuals and checklists loaded on an approved tablet computer. American believes it can save $1.2 million per year in fuel costs by switching to iPads in the cockpit, which is consistent with our analysis. If airlines were extremely aggressive about weight savings, they could provide incentives for passengers to go to the restroom before getting on a flight; doing so could save Southwest about$2.1 million per year. Less aggressive ways to save on fluid weight can come in the form of $2.4 million per year in savings by ditching the small water bottles provided to passengers during a flight. Budget airlines, like Spirit, have realized this expenditure and now only provide water for a fee. Finally, what about Bob Crandall’s olive theory? We calculate about$40,000 of annual fuel savings by subtracting one olive’s worth of weight for every passenger in today’s Southwest network.12

We’ve established that cutting weight can save airlines millions of dollars in fuel costs every year, but how much does this impact an airline’s bottom line? In 2013, Southwest’s fleet of almost 700 jets consumed about 1.8 billion gallons of fuel. Of every dollar earned in ticket prices, 33 percent was used to buy gas. Put another way, a reduction of fuel expenses by about 3 percent could increase profit margins by 1 percent.

According to MIT’s Airline Data Project, Southwest’s profits were $754 million in 2013. Over the past decade, the average yearly profit was$393 million. If Southwest wanted to install in-flight entertainment, it would reduce its average profits by 10 percent. Removing in-flight magazines could increase these average profits by over 1 percent (assuming no loss of advertising revenue). Other airlines stand to gain even more — Southwest is atypical in the industry for its consistent profitability over the past several decades. For an industry that counts profit-margin percentage points on one hand, small improvements matter.

From the airline perspective, this suggests a dual benefit from add-on fees (even for carry-on bags). The fees create incentives for people to lighten their travel gear, reducing fuel consumption. At the same time, they increase total revenues. So the fees are a win-win for the industry because they can improve both costs and revenues.

As long as fuel remains a significant portion of operating costs, airlines will continue to try to save money by shaving every ounce of weight they can from each flight departure. Some of this will come by providing incentives for passengers to lighten their personal travel gear and some will come from reducing the stockpile of service items carried on each flight. However, for an industry where pennies saved on each flight can lead to thousands or millions of dollars in yearly savings, the incentive for controlling weight — and even eliminating olives — is easy to understand.

Footnotes

1. By the nature of urban legends, the detailed breakdown of the cost savings is unclear. The “olive savings” range from $40,000 to$500,000 per year depending on the source. The cost of the olives themselves is sometimes included, along with fuel savings from reduced aircraft weight and time savings by catering crews. In the context of this article, we focus on the potential fuel savings from weight reduction. ^
2. The Transport Aircraft System OPTimization (TASOPT) tool, created by MIT professor Mark Drela, uses coupled low-level physics models for aerodynamics, structures and propulsion in order to calculate detailed performance characteristics for an aircraft. Read the model summary and model details. The model outputs fuel burn (among many other parameters) for each flight. We convert this to fuel cost by assuming a fuel density of 6.78 pounds per gallon and a fuel cost of $3.16 pounds per gallon. ^ 3. Aircraft and engine manufacturers spend billions of dollars annually to improve the fuel economy of their newest products, with amazing results. Between 1960 and 2014, the fuel efficiency of a commercial aircraft improved by 55 percent. Some sources claim fuel efficiency gains as high as 82 percent ^ 4. One of the challenges in evaluating air transportation fuel efficiency is accounting for differences in seating layout between airlines. Increasing the number of seats in an airplane increases the per-seat efficiency at the cost of a knee-busting ride for passengers. To further complicate the calculation of overall fuel efficiency, many flights also carry non-passenger payload like cargo and mail. In this article, we focus on the seat layout chosen by Southwest Airlines and ignore non-passenger payload. ^ 5. The fuel burn estimate assumes 85 percent load factor on the flight (122 of the 143 seats filled) with each passenger and his or her luggage weighing a total of 100kg (220 lbs). The aircraft is assumed to climb directly to the initial optimal cruise altitude, step climb as needed throughout the cruise phase of the flight, and descend continuously to touchdown. Wind is assumed to be calm with standard atmospheric temperature and pressure. Additional fuel allowances for taxi, terminal vectoring, alternate airport diversion and reserves are also included. ^ 6. When we refer to a “marginal pound,” we are talking about small amounts of additional weight beyond the basics that come with an airline ticket (like the weight of passengers and their travel necessities, usually in checked bags). Adding one pound increases the aircraft’s weight without altering the ticket revenue or traffic levels on that route. Adding the weight of another passenger, though, requires more intricate calculations. ^ 7. The marginal cost varies with mission distance: 1 cent per pound for a 500-mile trip, and about 7.3 cents per pound for a transcontinental, 2,500-mile trip. ^ 8. The “empty weight” for our model of the 737-700 is approximately 85,000 pounds. That’s the weight of the airplane itself, plus the weight of the seats and other parts installed in the cabin. Regardless of how many passengers, bags and small items are on board, the flight will always consume fuel just to carry its own empty weight. Interestingly, the flight will also consume fuel to carry fuel for later parts of the flight. This logarithmic relationship is described generally in the Breguet Range Equation. ^ 9. Just a quick note on passenger weight reduction: As with many consumer products, airline tickets are priced based on specific market characteristics and customer willingness to pay, not direct operating cost alone. Under a “cost-plus” model, airlines would forecast the total operating cost for a flight (fuel, crew, aircraft ownership, business overhead and so on), divide by the expected number of ticket sales, and add a profit margin to determine a single fare level for every seat on a flight. While appealing in its simplicity, this type of fixed-price ticket ignores nearly every lesson of airline management. Most notably, it fails to maximize revenue and ignores the complexities of airline networks. So, in the world of airline ticket pricing, it doesn’t matter what the exact cost of carrying a passenger might be — the value of an incremental passenger depends on the specific origin and destination, and a passenger’s willingness to pay. It’s not a good idea to charge heavier passengers more than lighter passengers. If such a policy were put into place, the fuel price difference would be about$7 between a light passenger (those in the Centers for Disease Control and Prevention’s 5th percentile) and a heavy one (CDC 95th percentile) on the BOS-DEN trip. Some have proposed passing this weight-driven fuel penalty to individuals (such as by adding $3.50 to the cost of a heavier person’s ticket and subtracting$3.50 from the cost of a lighter person’s ticket on this particular route). This is a poor policy decision for several reasons: It encroaches on issues of human decency; it is an insufficient economic burden to cause a change in passenger behavior; and it ignores the basic concept that passengers pay for tickets based on willingness to pay and specific market conditions, not the exact cost of carriage. ^

10. As published in the Official Airline Guide (OAG) 2013, obtained through the MIT Libraries. ^
11. Within the simulation we changed the weight of each flight. It’s important to note that we didn’t simply add one pound on top of a 100,000 pound takeoff weight — most computer simulations don’t have the fidelity to give a useful answer in this situation. Instead we adjusted the weight on each flight to several values above and below the target amount, and then calculated the rate of change of fuel cost with weight. For small changes in onboard payload, the relationship between fuel and weight is linear, and the slope of this line is what we’re after: the marginal fuel cost per pound. ^
12. By the nature of urban legends, we don’t know how much of Crandall’s projected savings came from weight reduction compared to material cost. Additionally, fuel cost and network characteristics are markedly different between Bob Crandall’s American Airlines and today’s Southwest Airlines. Nonetheless, these results indicate savings potential from a remarkably small weight reduction roughly in line with the original urban legend. ^

New Scrabble Dictionary Disrepects The Game Oct 18

All Life

Powered by WordPress.com VIP